Tuesday, 24 May, 2022
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HDFC can now issue new credit cards as RBI eases ban after 8 months

Once India’s top credit card issuer, HDFC was penalised for repeated technical glitches, RBI ban on launching digital products remains.

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The Reserve Bank of India has allowed HDFC Bank Ltd. to issue new credit cards, partially removing a months-long ban on the lender, people familiar with the matter said.

The central bank, however, retained the ban on HDFC Bank launching new digital products, the people said, asking not to be identified citing rules. About eight months ago, the country’s most valuable lender was penalized by the RBI for repeated online glitches that hurt its 50 million customers.

Following the curbs, the bank, once India’s top credit card issuer, lost out to peers including State Bank of India, ICICI Bank Ltd. and Axis Bank Ltd. HDFC Bank’s credit card outstandings shrank by 6.5% in the June quarter from the previous three months, hurting its overall retail portfolio.

HDFC Bank and RBI didn’t immediately respond to emails seeking comments.

The bank has been in the process of setting up digital and enterprise units to strengthen its online infrastructure and handle a larger volume of transactions. In February, the banking regulator appointed an external audit firm to look into the recurring outages.—Bloomberg


Also read: Nirmala Sitharaman to meet CEOs of public sector banks on 25 August to review performance


 

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